Marketing / Email Marketing

Guide on How to Segment Email Lists for Business Owners

Ellis Friedman, Kathryn Hawkins, Jake Johnson, & Paul Sokol

Updated: Jun 08, 2023 · 24 min read

Toolkit for download in this article

how to make more money with segmentation

Dear ,

Remember my awesome product? It’s still for sale. Click here to buy!

How many of these emails do you receive every week? Now think about how many of those bland email offers you actually act on. Probably not too many.

But think about how you feel when you get those offers from companies from whom you’ve already purchased. When done well, they take a different tone, right? Because you’re no longer just an email subscriber—you’re a paying client. You’re in a different segment, now.

Which is exactly why you should email your clients differently than how you email your prospects.

Client segmentation—aka email segmentation—is the act of intentionally subdividing your email list into any number of smaller lists that are determined by factors of your choosing. It’s all about reaching the right people at the right time on the right channel and intentionally showing care to nurture the existing relationship.

However, if you’re like most small businesses, you don't have the time or expertise to properly segment. Unlike big corporations with a full marketing team, you have to focus on all aspects of the business.

But you can still benefit from segmentation while still focusing on normal operations. And Keap can help.

This article will give you ground level, actionable, strategic recommendations on different segmentation tactics so you can leverage customer segmentation analysis like the big dogs.

Why is client segmentation the best thing since bacon?

People love a personalized touch. In fact, emails with personalized subject lines are 26% more likely to be opened. But personalization shouldn’t disappear as soon as someone gives you their money—it should ramp up. It’s just the beginning of a happy, long-lasting client relationship.

Take for instance the online clothing brand Johnny Cupcakes. Before employing email segmentation, they were sending the same offers to their entire email list of 80,000 people. As David Moth writes for “Econsultancy,” once they segmented their email list by “gender, client interests, brand preferences, and media habits,” they were able to then launch a targeted campaign “with separate emails for men and women who had expressed an interest in baseball.”

“This fairly simple segmentation resulted in:

  • 42 percent increase in click-thru rates
  • 123 percent increase in conversion rate
  • 141 percent increase in revenue per campaign”

Results like that would make any business owner go:

Kip Dynamite yes

Additionally, as you segment yourclients, you get to know them better. It’s way easier to develop new products and services that meet a market’s emotional and logical needs when you have more granular insights into those market segments. Things you may have completely overlooked in the past all of a sudden become clear.

And as you get clear on who your clients are, you also get clear on who you are, which strengthens your brand and offering. In turn, you separate yourself in a meaningful way from your competitors.

Finally, market segmentation of your clients enables you to increase your client retention as you go on to provide value-added offers and upsells that are relevant to your client base.

How to make more money with segmentation

Google “how to make more money in your small business,” and you’re likely to be served with thousands of articles on sales tactics. Email segmentation, however, is probably not one of the tactics listed on the first page of the search results. It’s mind-boggling—because a good segmentation strategy actually turns your email lists into powerful sales tools.

Here are three specific ways you can make more money in your small business with client segmentation:

Leverage multi-step progressive lead capture

When capturing leads from your website, it’s often a one-and-done type experience. “Give us your name, email, phone number, etc. and something will happen.” If you break up the collection of this data into micro-steps, however, initial conversion rates should go up.

Think about it: If you have a form with your name, email, and phone number, that is three pieces of data someone has to provide. If you only collect name and email, that is fewer data and therefore more people will likely be willing to fill it out.

What about the other pieces of data you need for your small business? Ask for it progressively through multiple forms.

After someone gives you his or her name and email, on the next page, ask for their phone number. After they provide their phone number, on the next page you can ask what time of day they want to receive a phone call.

What if someone doesn't provide his or her phone number, though? That’s okay—still deliver on the promise you made to send them the information or content asset they requested. The more engaged prospects will go through all steps. The tire kickers will fall out at some point in the process. Now you know who’s who. This is the entire point of client segmentation!

This means you can have more relevant and targeted follow up, depending on how far people make it through the process. You can talk to someone who only provided a name and email differently than someone who provides their phone number as well.

By sending hyper-relevant messaging based on someone's behavior, you should be able to push people through the sales process more effectively and generate more revenue.

Better sales rep focus

If you have a sales team that is having conversations with prospects and closing deals, segmentation can vastly improve productivity and sales results.

Think about it: If a sales rep is looking at the list of 50 prospects to call, who do they call first? Quite often, the first person to receive a call is whoever is at the top of the sale rep's list. However, there is no guarantee that the first person is the BEST person for that rep to be calling.

One easy way to segment your sales leads is by inbox engagement. If you have a prospect that has opened five emails and clicked through three of them, and another prospect who has only opened one email and never clicked, it would make sense to call the more engaged prospect first because they are obviously reading and interacting with your emails. There is no guarantee that first prospect will become a client, but the segmentation data says they are more likely based on their behavior.

Another way to segment sales leads, especially when making outbound phone calls, is to break them apart by time zone. If it is 8 a.m. Eastern time and a sales rep is looking at a list of 50 prospects to call, whom should they call first? Chances are that people on the West Coast aren't in the office yet, so it makes sense for the sales rep to focus on prospects in the Eastern time zone.

Even with basic customer segmentation like this, your sales reps will be able to work their books more productively, which should result in more closed sales.

Promotions to existing clients

Selling to a new client always takes more effort than selling to an existing client. With proper segmentation, it’s easy to sell to existing clients while still giving them a great experience.

Quite often, you will have products/services that are complimentary to other products and services. A great way to generate some quick cash is to run a limited time sale for a specific product that is only promoted to clients of another specific product.

For example, let's say you have a lawn service business. You mow lawns for a living. However, you also do basic gardening, too, like trimming bushes, hedges, and shrubs. Running a promotion to your existing lawn-service clients offering a special deal on basic gardening is a low-cost strategy for generating more revenue.

Can you promote that special deal to ALL clients? Sure, if you want. However, even if you choose to do that, you'll still want to segment out your clients by the things they've already purchased, so you can write relevant messaging per segment. The way you sell Product X to clients of Product A may be different than how you sell Product X to clients of Product B.

Conversely, if you try to sell the same product to all clients in the exact same way, chances are your message won't resonate strongly with ANY client, and the promotion will fall on its face.

7 Questions small businesses must answer before building a segmentation strategy

When you sit down to do your market segmentation, it can seem like a daunting task. This is normal. Any time you try to take something complex and break it down to simpler components, you’ll run into roadblocks.

In a post called, “How Smart Market Segmentation Leads to Stellar Revenue Results,” SBI, a management consulting firm specializing in sales and marketing, offered up eight questions to answer in building an effective segmentation.

1. How big is your market? What is its growth rate?

Obviously, you want to be in a market that is big enough to support your business and one that has a significant growth trajectory. If it’s too niche, you run the risk of pigeon-holing yourself into future irrelevance.

For basic demographic data, the American Fact Finder is a great resource to mine the U.S. Census Bureau data. There is a wealth of information regarding age, business and industry, education, governments, housing, income, and more—all for free. You can use this data to figure market sizes and compare data sets to see growth trends.

2. What industry trends are unfolding in your market?

Staying ahead of trends is important so that you can adjust your tactics strategically rather than reactively. The classic example of this is Kodak, who invented digital photography and sat on it, grossly underestimating how quickly the physical film industry would deteriorate. They could have dominated for the next twenty years. Instead, they reactively tried to go into digital and instead went into bankruptcy.

Try subscribing to Google Alerts for topics relevant to your market. They will deliver daily, weekly, or monthly digests of relevant news right to your inbox for free.

Also, check out Google Trends to see how the world is talking about topics. For instance, I searched “marketing automation” and the resulting chart shows a significant uptick in interest in the term, cluing me into the fact that it’s a growing market.

interest over time chart

Google Trends also gives you valuable data on where the term is searched for most geographically, and related keywords people use around the search term.

Finally, if there are any journals, periodicals, blogs or forums dedicated to your markets, make sure to subscribe to them and to carve out the time to read them. It’s an investment of time that pays off in spades.

3. What are the needs of your market? How are they changing?

Check out Nielsen’s free MyBestSegments tool, which gives you 66 distinct segmentation archetypes, complete with detailed breakdowns. You can do zip code searches to see what segments are represented locally. You can use the archetype data to get a better grasp on the mindset of your markets.

Utilize your existing client base. Send out a survey using a tool like SurveyMonkey to poll your clients on how well you’re serving them and what you can do better.

Use the information you collect to help build a segmentation plan. When creating your survey, ask questions that will help you match your database of clients to the archetypes you want to attract.

For example, if you’re trying to attract “wealthy middle-aged couples with kids.” Pepper in questions like, “On a scale of 1-10 how financially wealthy do you consider yourself?”

Analyze your survey results, and if you’re attracting “upscale people without kids,” then you need to assess how you’re attracting people and why you’re not attracting the right archetypes.

Want more objective data? Check out Google’s Consumer Surveys, which polls users across the internet in your market segments with a set of survey questions. It’s affordable and awesome. (Keap used it to create the 2018 Small Business Marketing Trends Report.)

4. What should be your go-to-market strategy for each product/solution?

With the cumulative answers from questions one through three, you will then have what you need to start formulating your go-to-market strategies for your products and services.

First, as venture capitalist Murray McCaig shares, you must develop a strong value proposition for your segments. How do you provide value to that market that no one else does? Then, develop a “detailed, believable plan that answers four questions:

  • What are you selling?
  • Who are you selling it to?
  • How will you reach your target market?
  • Where will you promote your product?”

5. How do your competitors go to market?

In your quest to differentiate yourself and provide a unique value proposition, you should become a student of what your competitors do.

I’ve found one great way to do this is a simple competitive audit. Pick your top five or so competitors, create a spreadsheet, and audit their websites, social channels, advertising, and such.

Click here to download a simple competitive audit Excel spreadsheet template. It's free!

Take a look at their messaging, design, and products. How are they positioning themselves? What kind of emotions are they trying to create? What’s the way they position their products?

Additionally, use Google Alerts to keep tabs on your competitors in the media and subscribe to their blogs to keep tabs on what they’re saying.

6. What are your competitive strengths and weaknesses?

Once you have studied how your competitors go to market, it’s helpful to create a matrix of strengths and weaknesses of your competitors and then to map yourself against them. Where is the white space? What is an area of the market that you can own that your competitors do not?

Sometimes, it’s also helpful to translate this to a positioning map that compares you to your competitors on an X/Y axis representing various brand approaches. Here’s an example showing the difference between car brands.

car chart

SOURCE: Marketing Audit of Renault & Volkswagen

For a small-business owner, you could create an x-axis that contains: high-touch client service vs. low-touch client service, and then for the y-axis, you could have low product quality vs high product quality (if you’re a service-based business replace “product” with “service”).

7. What are your opportunities and threats in the market?

After you’ve compiled your research on your competitors and clients, it should be easier to see the patterns emerge for your opportunities and threats in the market. Demographic trends, like an aging population, for instance, might necessitate changing the design of your app to account for older eyes. If your competitor is dominating in a high-price luxury market, can you provide a lower price product or service for the average Joe? By anticipating your threats and exploiting opportunities, you can better ensure long-term, sustainable growth.

How to segment email lists for small business in 3 easy steps

Now that you’ve answered those seven questions, you can identify the types of clients you have and make them unique offers. There are three steps involved:

Step 1: Format your buyer persona research in a compelling way

Group your list of clients by broad categories. By industry, for example—which may break down your list into real estate agents, attorneys, and dentists. Once you have your clients identified, here are six tips to create the perfect message for them.

  1. Goals: What are your clients’ primary and secondary goals and how can you help solve them?

  2. Challenges: What challenges do the people on your list regularly face?

  3. Take action: What can you do to help your client achieve their goal and overcome their challenges?

  4. Common objections: Why wouldn’t they buy your product/service? You can show social proofs and testimonials to help mitigate perceived risk.

  5. Marketing message: How should you describe your solution to your client? Since you’ve segmented them, you can tailor your language and pain points to their industry.

  6. Elevator pitch: Sell your client on your solution and how it will save them time, money and cost, again using language and topics specific to their segment

Now you have more insight you can use to craft your segmented emails and write the sales pages each segment arrives on. Which brings us to our next step, creating different mousetraps for your clients.

Step 2: Set up your mousetraps

To really take advantage of client segmentation, you could create a unique landing page for each client group. So for our industry example, we would need three pages in total—one landing page each for real estate agents, attorneys, and dentists.

Keap's landing page tool allows you to build these custom landing pages with links that can then be shared in emails or on social media platforms. With options that include ready-made templates or starting from scratch, you can easily and quickly set up a landing page that helps you capture more leads.

Step 3: Piece it together

Now that you understand the types of client groups you have and what product you’re offering to them, it’s time to put everything together. Start by going into your email tool and setting up each of your emails.

Pro tip: At the very minimum, personalize the email welcome (e.g. “Hi [FirstName]”). But consider personalizing the subject line as well as an added personal touch.

For each of the emails, map the call to action button or text to a link to the unique sales page. In this example you should have three emails with their own unique message, pointing to three unique sales pages.

This will allow you to track the number of emails that were sent out, who opened them and who opted in for your offer. When your client receives your email, they will feel you are talking to them because you took the time to identify who they are, what they want and how you can help them out.

10 Ways to segment your email lists

There are many ways you can segment your small-business email list. What is a segmentation strategy that will work for your small business?

Here’s a look at 10 ways businesses are using email segmentation to optimize their communication strategies:

By role

Much as a B2C baby apparel company would market different products to the parent of an infant and the parent of a toddler, a B2B company might send different email messages to different people within a company. Collect enough information about your prospects in your email form to identify their roles within their organizations, so you can customize effectively.

For example, ERA Environmental Solutions, a software company targeting the oil and gas industry, sends different emails to a top executive and a junior chemist, “with particular focus on tone and the information we’re trying to convey,” says digital marketing specialist Matthew Mercuri. “We understand that the junior chemist won’t have the power to make massive software acquisitions or purchases, but we do understand that they have the ability of running it up the chain.”

If you’re targeting lower-level gatekeepers, focus on the educational content that you can provide, such as e-books, white papers, and videos. Once you’re able to connect with executives, focus your messaging more heavily on demo offers and lining up that all-important phone call or meeting.

By needs

Before you begin your marketing efforts, it’s important to generate buyer personas so that you have detailed insights into who your clients are and what pain points you can help them solve. Once you’ve done this, you can group your subscribers based on these pain points, and craft customized messaging for each.

Evan Harris, co-founder and CEO of SD Equity Partners, works with a client base that needs access to financing. So, for instance, “if their issue is that they need a loan quickly and are feeling stressed over their short timeline, then explain to them how working with you can help to alleviate this stress and get their loan approved in an efficient and timely manner.”

Alternatively, if the challenge is that they haven’t been able to secure a loan due to past credit problems, that messaging would be reflected in the emails. Whether through surveys, forms, or one-on-one conversations, get to know your clients as well as possible so you’ll be able to find the messaging that hits them.

By region

Have a few different stores? If so, it’ll be important to segment your list according to your audience’s geographic location. While some of your offers and news announcements might apply to the entire chain, others—such as special menu items or live music at a restaurant, for instance—will only apply to one. Make sure that you carefully segment your leads based on which store they’ll be likely to frequent so that they only receive the deals and promotions that are relevant to them.

Is your only shopfront online? Regional marketing can still apply to e-commerce businesses. For instance, if it’s 30 degrees colder in Maine than California, perhaps it’s not the time to brag about beach weather and shilling sunglasses to your chilly New England clients quite yet.

By stage in the marketing funnel

You’ll often be marketing to several groups of people: prospective clients, existing loyal clientss, and past clients you’re hoping to win back. Although you want the same thing out of each of them—a sale—you’ll need to target them in different ways.

“Few things are more irritating to an existing client than bombarding him with emails that give him the impression you don't know who he is,” says Jacob Dayan, partner, and co-founder of Chicago-based Community Tax.

Some marketers go even further, using website data to showcase who’s truly interested in your offers. “Of prospective clients, we segment those who show the greatest interest versus those who appear only moderately curious,” says Dayan. “We reserve our most urgent offers for potential clients who are making repeated visits to our website and consuming lots of content.”

And what about the elusive “win-back” clients—the ones who’ve left you but you’re hoping to reconnect with? Segment them with a special message showcasing everything they’ve lost, and consider including a special promotion if they decide to come back. At the frozen yogurt chain Pinkberry, for instance, deserters are greeted with a photo of—well, dessert—and an offer for a free froyo with a week to redeem it.

Finally, why go to all the effort to send highly targeted campaigns to your client base, rather than rely on bulk messaging? Well, one look at the numbers should be pretty convincing: An e-commerce jewelry-making retailer,, tested targeted email marketing to segmented lists against a standard batch-and-blast campaign and found that clients converted to their offers at a rate of 208 percent compared to the non-targeted offers.

Take the time to get to know your audience and understand each group’s unique needs, and in turn, you’ll be rewarded with loyal clients who genuinely care about your company.

By sentiment

The unfortunate reality of business is that some clients just aren’t super happy, and that’s OK; you can fix that. But you probably want to talk to them differently than you talk to people who are happy as clams. For instance, if you’re looking for advocates to help you spread good news like a product launch or to refer a friend, you probably don’t want to ask that of people who have negative sentiments about your business.

So if you segment by clients who are happy, neutral, and dissatisfied, you can send an email asking for referrals to the happy clients. In an email for dissatisfied clients, you might include a link to make an appointment for a free training or support call.

By persona

Perhaps you segment your leads by buying persona, which is an excellent segmenting strategy. Whether you do or not, segmenting your clients by persona is still a clever way to make sure you’re shaping your message for the right audience.

If you have an offer you want to send to all your clients but want to maximize its impact, shaping that same offer slightly differently for each persona can help your success rate. Let’s say you want to offer a free webinar. You might know that one persona always wants more time in the day, so you’d position your webinar as one that will help them be more productive. If another of your personas is always worried about losing time, you might emphasize that the same webinar will save them hours every week. Same webinar, different message, more results.


RFM stands for Recency, Frequency, and Monetary, and you can analyze for this by looking at how recently someone purchased, how many purchases they have made over their lifetime as a client and the total dollar amount of those purchases.

RFM is based on the idea that 80 percent of your business comes from 20 percent of your clients—and you want to maximize that 20 percent. (As long as you aren’t aggressively targeting that 20 percent that they get fed up with you, of course.)

For instance, if you have a restaurant and people came back an average of every 45 days, you could come up with a targeted email campaign to try to lower that to 30 days.

Or if you see that you have a client who’s spent, say, $5,000 with your business since their first purchase, you can come up with a loyalty reward. Sort of like airline rewards programs—those who fly the most miles in a year get way better treatment than the plebes who only fly occasionally, but it keeps people dedicated to one airline in order to get those perks.

If you want to score your mailing list for RFM, you need to look at three things:

  1. Date of their last purchase
  2. Number of transactions within a set period of time (usually a year)
  3. The total or average sales attributed to the client

By sending specific emails to those you segment by RFM, you can target your messaging to loyalty and perks and get more interaction than you would with clients who aren’t as engaged.

For amplification

If you have a social or ad campaign and you want to attract eyeballs, send out an email to your most engaged clients asking them to view and share. You can even ask them to be like a stealth street team and get them to recruit more subscribers (daily newsletter The Skimm does something similar with Skimm’bassadors, who spread the word about The Skimm by wearing swag, organizing events, and giving feedback; in return, they get their birthday mentioned in the morning newsletter).

This works best with the most engaged client groups and can help freshen up your email content as well as getting more attention for your campaigns. #win

By lead source

An excellent—and even shrewd—way to segment to resonate with your email list is to segment by lead source. This is sort of a “hidden” way to segment: By tracking your lead sources, you can determine where they are when you reach them and how they like to be talked to.

For example, what if you sent out a coupon in the paper? That’s right, not over the World Wide Web, but in a physical newspaper. Say you chose five local publications and noticed that 80 percent of your respondents came through only two of those publications. Then you know where your target audience is, what they read, and what they respond to.

You can also do this a bit more overtly, too. For example, you could create a special email list for clients who originated from a certain trade show or event. You can really personalize your message when you know where they’ve come from.

Let your clients self-segment

If your email service provider offers a preferences management page for subscribers, your clients can self-segment by logging in and checking the boxes for the kinds of email content they’re interested in receiving from you. From there, you can deliberately create exactly the kind of content they want—and you’ll get a much better response.

It’s easy to get your clients to self-segment. You simply ask them to do so. Send an email with a link to their preferences page—or if your email software allows for it, include a list of links in the body or the email, and ask people to click on the ones they’re interested in learning more about. Based on their clicks, you can place them in specific nurture campaigns or tag them with a specific interest for future education.

The segmenting caveat

Client segmentation can be a really exciting rabbit hole to follow—it’s really hard not to get thrilled about giving people exactly what they want. But since there are so many different ways to segment, be careful not to fall into the trap of creating a bloated database. Segment too many ways, and ultimately your segments will become useless. Determine the most valuable ways for your business to segment, and pursuing those vigilantly.

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